You’re Planning for Retirement. Do You Still need Life Insurance?

Let’s be realistic. If you have an adequate investment and pension portfolio, if you have made provisions for your health care costs, if you have no one relying on you for financial support, maybe, just maybe you can afford to retire.

Have you thought about outliving your income? Perhaps a lifetime income annuity would be appropriate to cover your basic retirement needs.

Those with kids—and grandkids
How much will it cost to raise a child to age 17? In households with income over $105,000, it’s estimated to be $399,780. Per Child. Without college expense. Combined expenses may be $650,000 or more. How many children do you have? What happens when they come home to live after they graduate? How long will they stay? What happens if you’re is not around to pay these expense? Do you have adequate life insurance?

Grandparents provide the primary financial support for one out of 10 grandkids, and 49% of parents age 60 and older are still providing financial assistance to an adult child.

Is there still a need for life insurance protection? Absolutely!

Of healthy 65-year-olds, 38% of men and 50% of women will live to age 90.

And those in supporting parents
What about adult children who are supporting parents who are 65 or older? Some 15% of people age 40 to 59 are providing this support while still raising a young child or an adult child. For people 60 and older with a living parent, 50% of the parents need help with day-to-day activities. Does the caregiver still need life insurance? What happens if the caregivers are no longer around?

Add in medical and long-term care
Now let’s talk about the cost of medical care after retirement. According to Fidelity Investments, the average 65-year-old couple will spend $220,000 in 2013 dollars on out-of-pocket medical expenses during retirement.

Have you provided for this in your retirement planning? Keep in mind that this does not include the costs for long term care.

Long term care is currently $250 per day in Tampa, Fla. That is $91,250 per year. The average 65-year-old woman will need this care for 3.7 years compared with 2.2 years for men, but I know a number of instances where the person was in a nursing home for 10 years or longer.

Have you planned for this?

A solution
So let’s come back to life insurance—cash value life insurance. It will be there when it is needed most and provides guarantees, versatility and flexibility for changing situations. Cash value life insurance provides security, dignity and peace of mind and solves the risk problem for pennies on the dollar.

If you love somebody, owe somebody or have someone dependent on you, you need life insurance.

Marvin H. Feldman, CLU, ChFC, RFC, is president of the Feldman Financial Group in Palm Harbor, Fla., and president and CEO of Life Happens. He is a 41-year Million Dollar Round Table member and was the 2002 president. He is a 33-year member of the MDRT Top of the Table and a past Top of the Table chairman. He also is the recipient of the 2011 John Newton Russell award, the highest honor bestowed on an individual by the insurance industry.

My parents are living with us and is still in very good health (ages 55 and 60). What type of life insurance plan would be best to take out for them? They do not have any debt, only the basic day-to-day needs.

sounds like your parents are dependent on you, and not you dependent on them, correct? I don’t see any need for life insurance on them, especially if they have enough assets to cover their burial expenses. Invest the money and use it to live, instead of getting money when they die.
PS: all the cash value insurance agents on this sight will not like this answer, but oh well, it’s the truth.

Great post Marvin H. Feldman. I also like to highlight the accelerated benefits riders available in some U.L. policies. If the insured has a chronic, critical, or terminal illness, they can access some of the death benefit to help pay for these situations and still have money to pay for the final expenses. Using the cash value built up in the policy can help cover the gaps the health insurance may have or other unexpected costs like travel and home remodeling, and is generally received tax free.
“If you love somebody, owe somebody or have someone dependent on you, you need life insurance.” I agree.

Life insurance is often marketed to high-earning professionals and business owners as a means to put away additional funds for retirement over and above any type of retirement plan they might already have, such as a 401(k). Visit my blog http://www.skfinancial.com/blog

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Our goal is to help you understand the importance of life, disability and long-term care insurance in a sound financial plan, so you’re able to better protect yourself and your family. We give you up-to-date information and personal accounts of how these types of insurance can change lives, along with financial information and trends that allow you put it all into perspective.